THE TAKEAWAY: Housing Starts disappoint at 891K for August vs. 917K est., revised lower ->Building Permits disappoint at 918K vs. 950K est., revised higher -> USD Flat
Following the flat NAHB Housing Market Index print yesterday, both housing starts and building permits for the month of August in the U.S. disappointed market expectations and sent the greenback lower ahead of the FOMC rate decision, update on MBS/Treasury purchases and Bernanke press conference. Housing Starts did improve MoM in the South and although total reading missed estimates, the revision lower for July means that there was a 0.9% MoM improvement.
The U.S. Housing Starts indicator measures those new, privately owned homes that have begun the construction process. The print is released on a month by month basis, provides an overview of the U.S. housing sector and gives greater insight into types of units being built. Building Permits, also released on a month by month basis, measures those new homes given approval to begin construction. The reading is subdivided by area and gives insight into different regions
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) (5-Minute Chart)
Source: FXCM Marketscope
The data sent the USD lower, but weakness was short lived as traders continue to remain cautious ahead of the event risk surrounding the Fed this afternoon. Liquidity and price action look to remain below average as we await a possible taper. Stay up to date on developments live by following the DailyFXTeam Twitter or checking out the live trading room in the Analyst on Demand service.
Gregory Marks, DailyFX Research Team
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